Using SWIFT to Create a Best Practice Treasury InfrastructureJulian Tasker, Deputy Treasurer, Johnson MattheyJohnson Matthey's Group Treasury wanted to integrate its banking information with its TMS without multiple interfaces. After considering various options, SWIFT Corporate Access was chosen, and a business case put together. Implementation began in September 2009, with the key partners in the project: the first banks, TMS vendor and service bureau, IT/2. SWIFT Connectivity will now be rolled out across the company's remaining banks. The authors itemises some of the lessons learnt during the first stage of the SWIFT project.

Using SWIFT to Create a Best Practice Treasury Infrastructure

by Julian Tasker, Deputy Treasurer, Johnson Matthey

We use IT/2 as our treasury management system (TMS) at Johnson Matthey, which supports the majority of our treasury activities. The solution has web-based access for subsidiaries to enable in-house banking, and we have an interface between IT/2 and our accounting system, JD Edwards. We also have links to an online dealing platform, FXAll, and we import market data from Reuters. There are five banking systems in place in group treasury for making payments and retrieving statements which are not generally integrated with our TMS, together with a further 80 banking relationships elsewhere around the group.

As an in-country solution did not give us sufficient scope to manage our international requirements, the logical solution was to implement SWIFT Corporate Access.

The business challenge

Each of our banking systems has its own user IDs, passwords and control features, which would not be a problem if we were using only one system; however, as the number of banking systems increases and the number of user names, passwords etc. proliferates, the level of complexity grows and the control could be compromised as users struggle to keep track of each system’s security requirements.

In addition to our security concerns, our daily processes for retrieving statements and making payments through multiple statements were manual and extremely time consuming for our treasury team, and this effort was further replicated amongst our business units, many of whom hold multiple bank accounts. We also felt that our electronic banking environment was constraining our ability to move accounts between banks to optimise our cash management.

Elsewhere in the business we were aware that the same issues were faced, especially in our Precious Metals Marketing operations which also require access to multiple bank systems.

The technology solution

In Group Treasury we needed to communicate with our five key banking partners for obtaining statements and making payments across over 100 accounts on a daily basis. We also wanted to integrate our banking information with our TMS, without having to implement and maintain multiple interfaces.

The most obvious solution was to implement a single connection through which we could communicate with all of our banks. We looked at various options: bank-owned multi-banking solutions; multi-bank solutions offered in domestic markets such as Switzerland, Germany and France; and SWIFT Corporate Access. We decided that a bank-owned solution created too much risk to an individual bank and reduced our bank independence. As an in-country solution did not give us sufficient scope to manage our international requirements, the logical solution was to implement SWIFT Corporate Access. This gave us the benefit of bank-independent connectivity across all our banking partners using the secure, reliable channel (SWIFTNet) already used by banks to communicate with each other.